Surgepays Inc (SURG) News & EventsSURGSurgepays Inc

SurgePays Completes $27.5M Asset Sale

SurgePays announced that it has completed the sale of its ClearLine point of sale, or POS, engagement platform, its managed marketing services platform, and a turnkey wireless company, together with related operating assets, to GPO Plus for a total consideration of $27.5M. As consideration for the transaction, GPO Plus issued to SurgePays 25M shares of a newly designated Series D preferred stock. As part of the transaction, SurgePays also entered into a put option agreement with Emerald Shoals Targeted Opportunities Fund, giving SurgePays the right to sell the Series D preferred stock, or the common stock it converts into, to Emerald Shoals for $27.5M in cash.

SurgePays Forms Joint Venture Redline with Wireless Distributor

SurgePays announced the formation of Redline Wireless Group, a Wyoming limited liability company established as a joint venture between the company and one of the largest wireless master distribution organizations in the United States, which operates an executed dealer agreement footprint of more than 20,000 active independent prepaid wireless dealers. Redline has been formed to market, distribute, and support prepaid wireless services nationwide across this independent dealer footprint. Redline will combine, in a single joint venture entity, the company's MVNO infrastructure, including the LinkUp Mobile consumer brand, billing and provisioning systems, customer service and technical support, general and administrative infrastructure, and the Company's operations center, with access to the Contributing Member's national independent dealer prepaid wireless distribution channel. "We are pairing our full MVNO infrastructure with one of the largest independent dealer distribution footprints in the country, more than 20,000 active dealers already selling prepaid wireless every day. Our team spent over a year with LinkUp Mobile integrating and developing the systems in a live environment to support this level of scale, with the intention of building one of the largest prepaid wireless companies in the nation. Both parties share the goal of reaching more than 1 million subscribers in the coming years. Even our most conservative internal models show Redline generating more revenue and profit by month 18 than any prior SurgePays subsidiary has achieved," said Brian Cox, Chairman and Chief Executive Officer of SurgePays. Redline is owned 51% by SurgePays, as controlling and managing member, and 49% by the contributing member, as noncontrolling member. SurgePays intends to consolidate Redline as a majority-owned controlled subsidiary in accordance with Accounting Standards Codification 810, with the contributing member's 49% economic interest reported as a noncontrolling interest.